How to best deal with KOOKS at this web site Message Board

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Pastimes : How to best deal with KOOKS at this web site

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To: Herb Fuller who wrote (680)	7/5/1997 5:25:00 PM
From: Bill Ulrich	of 1894

Hi Herb, re: market mechanics I've never seen it work this way, <...I look for interest rates to drop in the coming months as investors move some of this capital over into interest bearing securities...> Considering the bond market, rates do not follow demand. Rather, demand is increased when rates rise as investors weigh the risk/return ratio of stocks vs. bonds. That is to say, rates could theoretically drop should an exodus into bonds occur. But without a rate increase to induce the exodus, it won't happen. Perhaps we'll get my wish for a rate increase. <(re:lower rates)...and this will slow the stock market down a bit and at the same time with interest rates being lower this will support the stock market...> Rising rates would slow down the market, lower rates would support the market. I think I might be misunderstanding your point. Another question with regards to: <...there is just too much capital coming into the market at the present time, some 20 billion dollars worth a month, for the market to tank...> This has been alluded to over several previous posts. I wonder how much of the current market value can be attributed to us simply throwing money at it vs. sound fundamentals. I guess that question could be answered with an aggregate earnings chart. If aggregate earnings support the current, monumental value of the market, then we have nothing to worry about. If I'm buying just because your buying (or if we're both buying just because the market is going up - the trendy thing to do), then we turn around and figure out the companies aren't really worth that much, you and I will have a quick race to the trading desk. BTW - I do all my trading on line - you may do that as well. I guess it would be a race between the faster modems. -MrB

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